| Global economy has long Covid, claims data due and OPEC meets. Volatility After an opening half of the year which saw global equities put in one of their strongest performances of the last two decades, investors are expecting more volatility in the coming months. The start of stimulus reduction from the Federal Reserve and the increasing realization that Covid-19 may be with us for a very long time seem set to be the dominant themes. Asia's lower success in rolling out vaccine programs is already making the region less attractive to investors as the economic recovery stumbles. Claims Investors get a last look at the employment situation ahead of tomorrow's payrolls report when weekly jobless claims data is released this morning. Consensus is for 388,000 people to have signed on for unemployment benefits last week, with continuing claims showing a small drop from the previous number. Yesterday's ADP employment data showed the U.S. added more jobs than expected in the month, while economists surveyed by Bloomberg expect tomorrow's payrolls number to jump by more than 700,000. Oil meeting OPEC and its allies will decide today on production levels for the coming months, with clear disagreement ahead of the meeting between Russia wanting to open the taps and Saudi Arabia seeking a more cautious approach. Possible supply hikes are being discussed for August or September, Kazakhstan's Energy Minister Nurlan Nogaev told reporters. In the market today, oil is trading above $74 a barrel, the highest level since 2018, with analysts expecting further rises unless OPEC+ delivers a big surprise production boost. Markets mixedPersistent fears about the economic cost of the delta variant in Asia are keeping a lid on equity gauges as stocks in Europe and the U.S. add to gains. Overnight the MSCI Asia Pacific Index slipped 0.5% while Japan's Topix index closed 0.2% lower. Hong Kong markets were closed for a holiday. In Europe the Stoxx 600 Index was 0.5% higher at 5:50 a.m. Eastern Time in a broad-based recovery led by banks and travel stocks. S&P 500 futures pointed to a small gain at the open, the 10-year Treasury yield was at 1.482% and gold rose. Coming up... Claims data is at 8:30 a.m., with June manufacturing PMI at 9:45 a.m. and ISM manufacturing at 10:00 a.m. Atlanta Fed President Raphael Bostic speaks later. Carmakers release their U.S. sales numbers. The OECD is meeting on global corporate taxes. Walgreens Boots Alliance Inc. and Acuity Brands Inc. are among the companies reporting results. Canadian markets are closed for a holiday. What we've been readingHere's what caught our eye over the last 24 hours. And finally, here's what Joe's interested in this morningI was reading ZeroHedge yesterday, and I saw a post by Michael Pento complaining that central banks had "murdered the markets." In particular, he says, the Bank of Japan, by engaging in Yield Curve Control -- fixing the price of 10-year JGBs at roughly 0% -- had basically eliminated any private trading in that market. This is more or less true. There have been days in recent years where not a single Japanese 10-year bond traded. If the central bank is setting the price and not letting it move, then why bother to trade? But while some of the facts are true, they don't really matter. The measure of government economic policy is how it affects the real lives of human beings. And it would be extremely hard to point to the lack of trading or volatility in JGBs and connect it to some actual problem for the Japanese people. The Japanese unemployment rate is 3%. On a year-over-year basis, Japanese CPI is -0.1%. Japanese Labor Force Participation is over 74%. The yen remains a robust store of value. (Remember, people have predicted for years that the Japanese currency would be obliterated due to all the debt and so-called money printing.) This isn't to say there aren't challenges in Japan like anywhere else. Demographics, for example, may post ongoing challenges. But this is not a JGB issue. Intuitively many people who operate in the realm of markets like "free markets". And they value concepts like price discovery. It's understandable. But a government bond curve literally can not be a free market, because it is always implicitly or explicitly betting market on the path of short-term rates. (Remember, a 10-year government bond can be decomposed into forty distinct 3-month bills, and 3-month bills are indubitably connected to overnight rates, and so therefore 10-year bonds are indubitably connected to overnight rates.) As such complaining that yields are manipulated is as logical as complaining that taxes are manipulated or that the age to buy cigarettes is manipulated. Rates are a policy instrument so they couldn't be anything but manipulated. They were when Volcker lifted them and they are now that central banks are keeping them nominally low. People think there's something different now because the tools used by central bankers are in some ways more explicit. But it's always been policy. This isn't to say that the current stance of policy is ideal by any stretch. More expansionary fiscal policies or other choices to boost growth might create conditions, whereby the central bank was a less important player in the economy. A lot of people might like that, but that's a separate issue. Don't cry because a central bank murdered the market. Cry because it had no other choice. Joe Weisenthal is an editor at Bloomberg Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. | 
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